All-Digital
In a perfect world, all cable systems would transition to 100 percent digital. The RF bandwidth reclaimed from analog would be employed for more high definition (HD) content and faster Internet speeds. None of this would cost subscribers more money. And cable executives would relish touting their HD programming lineup on par with satellite’s.
But, alas, it isn’t a perfect world. Cable operators face a variety of challenges when it comes to migrating to all-digital. Big cable ops must deal with their vast inventory of legacy set-top boxes, and any new digital boxes must be the more expensive variety with separable security.
Smaller operators have to invest in the full array of new digital equipment or get beat out in rural markets by satellite. And all operators have to communicate with their subscribers about transitioning to digital, sometimes at an additional cost to the sub.
According to Brian Dietz, spokesman for the National Cable and Telecommunications Association, cable’s digital penetration nationwide is 62 percent.
But the remaining 38 percent is a tough nut to crack.
Comcast targets mid-tier
After going all-digital in a couple of markets, most notably Chicago, Comcast is now focusing its digital efforts on a particular programming tier. Project Cavalry, as it’s known internally, is a company initiative to bring digital cable to mid-level subscribers. The first market for this project is Oregon, specifically the cities of Salem, Eugene and Portland.
According to Comcast spokeswoman Alana Davis, the company has 70 percent digital penetration over its footprint, with 5 percent of that being all-digital. Last November, Comcast began its initiative to help its expanded basic subscribers upgrade to digital.
Comcast’s expanded basic customers don’t usually have set-tops, but they do receive more analog channels than limited basic customers. As part of Project Cavalry, customers are receiving free set-tops and up to two digital terminal adapters (DTAs) for extra TV sets. DTAs convert digital signals back to analog for analog TV sets.
As far as set-tops are concerned, Jay Kreiling, Comcast’s VP of video services, said the company is using either Pace, Thomson or Motorola, depending on the market. But the set-tops are MPEG-2, rather than the more efficient, but also more expensive, MPEG-4.
"The need is more for transitional set-tops," Kreiling said. "The adapters provide a low-cost solution for secondary TV sets."
Kreiling said the big driver for moving expanded basic customers to digital is to provide them with the HD programming they want. "The end result is to get the bandwidth to offer customers more HD channels, which is becoming the basis for competitive comparison," he said.
Transitioning to digital allows operators to reclaim significant bandwidth. With MPEG-2, a 6 MHz, 256-QAM (quadrature amplitude modulation) channel can typically carry at least 10 standard definition (SD) or two HD programs. Additional processing can increase that to 11-12 SD or three HD programs. Analog supports only one channel in a 6 MHz band.
MPEG-4 enables a 50 percent bit-rate reduction over MPEG-2.
As for Comcast’s foray into all-digital in its Chicago and Calaveras County, CA, markets, Kreiling said the company learned that the equipment needs to be as simple as possible for the customers. And communication with customers is key to avoid complaints.
"We need to communicate early and often," Kreiling said.
Cost of set-tops
Just before leaving office, former FCC Chairman Kevin Martin issued a letter to the Senate Commerce Committee, complaining that cable operators move programming to all-digital and then charge subscribers more for the boxes necessary to receive the digital cable services.
Set-tops are probably the biggest stumbling block to cable operators moving to all-digital. Since June 2007, the FCC has mandated that any newly deployed digital set-tops have separable security. This means that the conditional access (CA) keys to authorize digital programming must be located on a removable CableCard. The access keys cannot be embedded within the device.
The FCC requires the separable security for a couple of reasons. One is to make it more convenient for customers to move around with their set-tops. The other is to open up competition in the set-top market, which has been dominated by Motorola and Cisco (formerly Scientific Atlanta).
Brent Smith, president of Evolution Digital, a vendor of turnkey digital systems for tier 2 and tier 3 operators, explained that outside the United States a non-proprietary CA system has been developed. Other countries joined forces to develop an open technical standard for the delivery of digital TV and data services. This standard became Digital Video Broadcast (DVB). DVB requires the CA system to interoperate with various devices.
"The security has to be separated from the hardware in DVB through either a Smart Card or CableCard," said Smith. And the scrambling key for the CA system must be open, meaning that it must interoperate with any set-top, added Smith.
Evolution Digital has an exclusive agreement with Conax to use Conax’s open CA system. But there are other vendors of open CA systems, including NDS, Irdeto and Xcrypt.
Besides the CA system, there’s the issue of how advanced newly deployed set-tops should be.
"We believe anybody putting in a box today needs to support MPEG-4 and HD," said Smith. "The challenge for bigger operators is the enormous legacy of MPEG-2."
Not only do the high-end, next generation set-tops cost more, but as far as MPEG-2 vs. MPEG-4, it’s also kind of an all-or-nothing choice. Switched digital video (SDV) could minimize the bandwidth tax in a transition to MPEG-4, but transmitting both formats simultaneously to the set-top wouldn’t be an efficient use of bandwidth.
While Smith says it’s better to deploy fully-loaded new set-tops, he doesn’t think it’s critical to have a set-top for each TV set.
"We distinguish between the primary box and those that are secondary," he said. "It seemed illogical to use high-end boxes for secondary TVs. The purpose of low-cost DTAs is to be able to still use those TVs, but still be able to convert to all digital."
Bresnan gets waiver
Bresnan Communications has gone all-digital in its 17,000-subscriber Gillette, WY, system. Pragash Pillai, Bresnan’s VP strategic engineering, said the Gillette headend equipment is from Motorola, and the majority of the system’s set-tops are Motorola DCT 700s.
The FCC granted Bresnan a waiver to deploy the entry-level set-tops with integrated security in Gillette.
"We are unique in that when we did our transition, we got the FCC security waiver, and we were able to use the DCT 700," Pillai said. "It has embedded security, so the set-top is cheaper."
Pillai said the technical side wasn’t nearly as challenging as the customer communication side. Bresnan aired public service announcements to inform people about the transition, held events and forums in Gillette, pitched local news media on doing stories about the transition, and gave presentations to local government.
Gillette was Bresnan’s first system to go all-digital. The company has no definite plans for going all-digital in another system as yet.
RCN crushes analog
In 2008, RCN launched a transition to all-digital in its major metropolitan markets. As of February 2009, RCN had completed the transition, known as Analog Crush, in New York, Boston, Philadelphia, Washington DC and Chicago.
Tom McKay, SVP operations for RCN in Chicago, said the big driver for going all-digital was HD programming.
"As we moved into more HD, in order to gain enough capacity, we had to reclaim as much bandwidth as possible," McKay said.
Like Comcast in its Oregon systems and Bresnan in Wyoming, RCN also chose to use cheaper, MPEG-2 set-tops. Like Bresnan, RCN was also granted an FCC waiver to deploy DCT 700s.
"Having that cheap box has allowed us to convert to digital," said McKay.
Before transitioning to digital, RCN implemented digital simulcast in 2007. While few cable companies have flipped the all-digital switch, most deployed digital simulcast several years prior to RCN.
"For companies who didn’t deploy digital simulcast, they have a bigger hurdle to get into the game," said Rick Swiderski, VP of engineering at RCN.
RCN made customer communication a top priority. The company ran infomercials to begin notifying customers about the move to all-digital. Then letters were sent several times, advising customers to obtain new set-tops. In the final week, customers received phone calls.
Small operators
NexHorizon Communications is going all-digital in its Chula Vista, CA, system and plans to acquire Phoenix Communications of Michigan in early 2009 and transition that system to all-digital as well. NexHorizon is getting its digital headend equipment from Blankom, a manufacturer that serves small to medium cable operators.
Gerhard Franz, president of Blankom, said the non-proprietary Blankom headend interfaces to any CA system. He said smaller operators must transition to digital in order to compete with satellite. Digital allows the operator to offer services that rural customers are accustomed to receiving from satellite: video on demand (VOD), personal video recorders (PVRs) and HD.
"I’m dealing with small operators on a daily basis," Franz said. "They need a lot of support. They don’t have the engineering staff. All it takes is one bit in the wrong place, and you get nothing."
While some small operators with long-range vision may choose high-end set-tops, others need to go all-digital more quickly.
In October 2008, the American Cable Association filed its support for a request by Cable ONE for a waiver to deploy integrated HD-capable all-digital devices (HD ADDs) in its Dyersburg, TN, area cable system.
"The fastest and cheapest way to provide consumers in small and rural markets with more HD programming choices, and broadband speeds that approach 100 Mbps is for operators in these areas to go all-digital," said ACA President and CEO Matthew M. Polka. "Unfortunately, for many of ACA’s members, the digital set-top boxes that are required under existing rules are just too expensive to deploy. The use of HD ADDs gives cable operators a cost-effective way to transition to an all-digital network."
Benefits of analog
Some cable companies have not transitioned to all-digital in any systems yet.
"With digital TV, you need a set-top on every single element," said Doug Ike, VP of advanced engineering with Charter Communications. "We still see quite a lot of benefit to continuing with analog."
The NCTA’s Dietz said, "Cable sees an advantage in analog because consumers can subscribe without needing a set-top, and it can be a way to attract consumers who haven’t subscribed in the past."
However, Charter is starting to deploy all next-generation set-tops that do support MPEG-4 and HD.
Ike said Charter’s plan for 2009 is to continue to employ digital/analog simulcast and SDV. "It (digital) is clearly a direction we all want to be moving in," Ike said. "It’s a question of timing."
Linda Hardesty is associate editor of Communications Technology.
